5 Stocks Setting Up to Break Out
With that in mind, here's a look at five stocks that are setting up to break out and trade higher from current levels.
One stock that's quickly approaching a major breakout is on-demand software and professional service provider Responsys(MKTG) . This stock is off to a monster start in 2012, with shares trading up over 40%.
If you take a look at the chart for Responsys, you'll notice that this stock trended up strong from last November's low of $7.30 to a recent high of $12.78 a share. After hitting that high, the stock plunged to $9.69 but then recovered from that level and closed at $12.71 a share on Thursday. That recent rebounded came on heavy upside volume, and it's now pushing MKTG within range of triggering a major near-term breakout trade. On Thursday, the stock closed up 5.8% on volume that registered over 850,000 shares, which is well above its average volume.
Market should now look for long-biased trades if MKTG can manage to break out above some near-term overhead resistance at $12.78 a share with high volume. Look for volume on a sustained move or close above $12.78 that registers near or well above its three-month average action of 443,744 shares. If we get that action soon, look for MKTG to rip higher towards its next significant overhead resistance levels at $15.66 to possibly its 52-week high of $18.19 a share.
What I like about the potential for MKTG here is that this recent up-move is coming right after the stock found high-volume buying right around its 50-day and 200-day moving averages. As long as those levels hold, and MKTG can sustain a trend above $12.78 with strong upside volume flows, then this stock should move notably higher in the near future.
I also featured Responsys in "5 Stocks Insiders Love Right Now."